"Solar power plants are the next big thing in renewable energy," says Sven Teske of Greenpeace International and co-author of the report.

The report focuses on a technique called concentrating solar power (CSP), which uses mirrors to concentrate the sun's energy and convert it to heat and then to electricity.

CSP plants are suited to hot, cloudless regions such as deserts in the Sahara or the Middle East.

The new report says investments in CSP plants were set to exceed 2 billion euros (US$2.80 billion) worldwide this year, with the biggest installations under construction in southern Spain and California.

"Concentrating solar power could meet up to 7% of the world's projected power needs in 2030 and a full quarter by 2050," the report says, of the most optimistic scenario.

That assumes a giant surge in investments to 21 billion euros a year by 2015 and 174 billion a year by 2050, creating hundreds of thousands of jobs. Under that scenario, solar plants would have installed capacity of 1,500 gigawatts by 2050.

That is far more optimistic than business-as-usual projections by the IEA, which indicates that "by 2050 the penetration of solar power would be no higher than 0.2 percent globally," the report says.

CSP uses arrays of hundreds of mirrors or lenses to concentrate the sun's rays to temperatures between 400 and 1,000°C to provide energy to drive a power plant.

Sunny skies

CSP only works under sunny skies, unlike solar photovoltaics, which turn the sun's rays directly into electricity in panels and generate some power even on overcast days.

"We now have a third billion-dollar technology alongside wind and solar photovoltaics," says Teske.

The report says generation costs range from 0.15 to 0.23 euros per kilowatt hour - above fossil fuels or many renewables - and would fall to 0.10 to 0.14 euros by 2020. Guaranteed sales prices were needed to spur investments, it says.

CSP installations made up just 430 Megawatts of the world's electricity generation capacity at the end of 2008.

"CSP plants can deliver reliable industry-scale power supply around the clock due to storage technologies and hybrid operations within the power plant," says Jose Nebrera, president of ESTELA.

Australian solar thermal?

Australian energy expert, Professor David Harries of Murdoch University in Perth, says solar thermal is highly relevant to a climate like Australia.

"One of the ideas is to connect large solar thermal systems around the fringes of the grid in Australia," he says.

Harries says it would be possible to store solar thermal heat in molten salt and use the energy to supply night time or peak power needs.

He says other research has shown solar thermal in combination with solar photovoltaic could supply 69% of US electricity needs by 2050.

"It would be expensive but the expense of not doing it is also going to be expensive," says Harries.

Harries say no equivalent study on solar thermal has been carried out in Australia yet.

He says the price of electricity in Australia is currently too cheap to provide an incentive to move towards solar thermal.

"That may change when emission trading comes in," says Harries.

Associate Professor Keith Lovegrove, who leads solar thermal research at the Australian National University says recent moves by the government could make solar thermal more competitive.

He says an expanded Mandatory Renewable Energy Target plus a $1.6 billion boost to establish solar energy power stations will give the technology a "leg up" it needs.